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Daily Market Lookup

  • Asian shares slumped on Tuesday as fears about a drawn out Sino-U.S. trade war, protests in Hong Kong and a crash in Argentina’s peso currency drove investors to safe harbors like bonds, gold, and the yen. Hong Kong’s airport, the world’s busiest cargo airport, reopened on Tuesday after protesters managed to close it down the previous day. The mood remained cautious as the increasingly violent demonstrations have plunged the Chinese-ruled territory into its most serious crisis in decades. The weeks-long protests began in opposition to a bill allowing extraditions to mainland China but have quickly morphed into the biggest challenge to China’s authority over the city since it took Hong Kong back from Britain in 1997 Sentiment was already weak due to increasing signs that the United States and China will not quickly resolve their year-long trade war. Markets were hit with further turbulence after protesters managed to close down Hong Kong’s airport on Monday. Traders were also on edge after market-friendly Argentine President Mauricio Macri suffered a mauling in presidential primaries, increasing the risk of a return to interventionist economic policies. Analysts said that trading could be subdued as many investors are off for summer holidays. Yet, there was no shortage of gloomy news for investors looking to catch their breath from several months of market ructions.
  • Consumers in the United States kept their expectations of inflation restrained in July, data showed on Monday, validating concerns that prompted the Federal Reserve to start cutting interest rates. The Federal Reserve Bank of New York’s survey of consumer expectations showed that people’s average outlooks for inflation declined by 0.1 percentage point to 2.6% over both one- and three-year time horizons. Uncertainty about inflation also fell. At the end of July, the Fed cut rates for the first time since 2008, citing a witches’ brew of economic concerns, including the U.S.-China trade war. One other issue is that inflation has failed to reach the Fed’s 2%-a-year target for a sustained period. The Fed’s preferred inflation gauge, known as the core personal consumption expenditures price index, gained at an annualized 1.6% pace in June. If people expect inflation will remain lower than the Fed’s target, policymakers lose credibility. Low inflation also makes it more likely that interest rates will fall near zero and lose their ability to encourage further economic activity. The Fed currently targets short-term rates between 2.00% and 2.25%. Markets are betting the Fed will have to cut rates again as soon as its meeting next month. The New York Fed’s inflation survey, based on a rotating panel of about 1,300 heads of households, is one gauge the Fed considers along with other data on price pressures. The record-low reading on records dating to 2013 is around 2.4%. Overall, consumers report a reasonably cheery view of their own financial situation, with a largely stable view of the price hikes they expect to see in medical care and rent even though they see even higher gasoline and college education prices than they did the last time the survey was taken.
  • The safe haven yen was trading near seven-month highs against the U.S. dollar on Tuesday as investor sentiment was shaken by a currency crisis in Argentina, unrest in Hong Kong and growing indications that trade tensions are hitting global growth. Japanese currency, which attracts flight-to-safety flows in times of market stress, has strengthened this month amid increasing signs that the U.S. and China will not reach a quick resolution in their year-long trade war and the prospect of further monetary easing by the U.S. Federal Reserve. The currency received an additional boost after protesters managed to close down Hong Kong's airport on Monday amid ongoing demonstrations. Surprise primary election results in Argentina, which resulted in a rout in the country's peso currency, stocks and bonds, have also added support. The single currency had edged higher on Monday after Italian bond yields pulled back from five-week highs on relief that rating agency Fitch left the country's credit rating unchanged. Longer-term prospects for the euro remain grim with the European Central Bank widely expected to ease policy as early as September and on lingering concerns towards Italy, where its deputy prime minister and right-wing League party leader Matteo Salvini has called for early elections. The selloff came amid fears of a possible return to interventionist policies, and by extension a possible debt default after conservative Argentina President Mauricio Macri lost by a much wider-than-expected margin to the opposition in presidential primaries.
  • Oil prices fell on Tuesday, offsetting narrow gains in the previous session, as sluggish demand forecasts countered expectations that major producers would prop up oil prices by limiting crude oil output. Saudi Arabia, the de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), said late last week it plans to keep its crude oil exports below 7 million barrels per day in August and September to help drain global oil inventories. Analysts expect the country to support prices ahead of its plans to float Saudi Aramco, in what could be the world's largest initial public offering (IPO). Saudi Aramco was ready for its IPO, but the timing for the deal will be decided by its sole shareholder, the Saudi government, a senior executive said on Monday. Kuwait on Monday also reiterated its commitment to OPEC+ supply curbs after Oil Minister Khaled al-Fadhel said Kuwait had cut its own output by more than required by the accord. OPEC and its allies, known as OPEC+, have agreed to cut 1.2 million barrels per day (bpd) since Jan. 1. But booming U.S. shale oil production continues to chip away at efforts to limit the global supply overhang, weighing on prices. U.S. oil output from seven major shale formations is expected to rise by 85,000 barrels per day (bpd) in September, to a record 8.77 million bpd, the U.S. Energy Information Administration forecast in a report. Gloomy forecasts for the global economy and oil demand growth have also dragged on oil prices as the trade dispute between the United States and China escalates.

 

 
Intraday RESISTANCE LEVELS
13th August 2019 R1 R2 R3
GOLD-XAU 1,526-1,530 1,539 1,545-1,550
Silver-XAG 17.50 17.90 18.50-18.90
Crude Oil 54.90-55.50 56.05 56.50-57.00
EURO/USD 1.1200-1.1250 1.1290 1.1325-1.1350
GBP/USD 1.2065-1.2100 1.2150 1.2190-1.2250
USD/JPY 105.80-106.10 106.50 107.00-107.60

Intraday SUPPORTS LEVELS
13th August 2019 S1 S2 S3
GOLD-XAU 1,509-1,500 1,489 1,481-1,474
Silver-XAG 17.20-16.80 16.60 16.20-15.90
Crude Oil 54.50-54.05 53.60 53.00-52.50
EURO/USD 1.1180 1.1130 1.1090-1.1000
GBP/USD 1.2010-1.1980 1.1950 1.1900
USD/JPY 105.00 104.60-104.00 103.50

Intra-Day Strategy (13th August 2019)
GOLD-XAU Buy on Dips
Silver-XAG Buy on Dips
Crude Oil Neutral
EUR/USD Neutral to Buy
GBP/USD Neutral to Sell
USD/JPY Neutral to Sell

Gold – XAU

AAFX TRADING

on Monday made its intraday high of US$1519.67/oz and low of US$1487.40/oz. Gold up by 0.896% at US$1510.71/oz.

Technicals in Focus:

In daily charts, prices are above 50DMA (1410) and breakage below will call for 1400. MACD is above zero line and histograms are decreasing trend and it will bring downward stance in the upcoming sessions. RSI is in overbought region and more upside is expected before it gets stretched. Stochastic Oscillator is in overbought territory and giving negative crossover to confirm bearish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1515-1469 with risk below 1469, targeting 1526-1532-1539 and 1545-1550. Sell below 1526-1550 keeping stop loss closing above 1550, targeting 1510-1500-1494 and 1489-1481.

 
Intraday Support Levels
S1     1,509-1,500
S2     1,489
S3     1,481-1,474
Intraday Resistance Levels
R1     1,526-1,530
R2     1,539
R3     1,545-1,550

Technical Indicators

Name   Value Action
14DRSI  

75.3669

Buy
20-DMA   1451.22 Buy
50-DMA  

1409.22

Buy
100-DMA   1348.80 Buy
200-DMA   1312.23 Buy
STOCH(5,3)   87.519 Sell
MACD(12,26,9)   29.325 Buy

Silver - XAG

AAFX TRADING

Silver on Monday made its intraday high of US$17.14/oz and low of US$16.79/oz. Silver settled up by 0.613% at US$17.04/oz.

Technicals in Focus:

On daily charts, silver is sustaining above 50DMA (15.70), breakage below will lead to 15.20. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in overbought region, indicating buy signal for now. The Stochastic Oscillator is in overbought region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 17.20-15.00 targeting 17.50-17.90 and 18.50-18.90; stop breakage below 15.00. Sell below 17.50-18.90 with stop loss above 18.90; targeting 17.20-16.90-16.60 and 16.20-15.90.

 
Intraday  Support Levels
S1     17.20-16.80
S2     16.60
S3     16.20-15.90

Intraday  Resistance Levels
R1     17.50
R2     17.90
R3     18.50-18.90

TECHNICAL INDICATORS
Name   Value Action
14DRSI   74.629 Buy
20-DMA   16.52 Sell
50-DMA   15.67 Buy
100-DMA   15.26 Buy
200-DMA   15.20 Buy
STOCH(5,3)   84.246 Buy
MACD(12,26,9)   0.415 Buy

Oil - WTI

AAFX TRADING

Crude Oil on Monday made an intra‐day high of US$55.03/bbl, intraday low of US$53.45/bbl and settled up by 0.969% to close at US$54.67/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 100DMA i.e. 55.88 which is a resistance level and breakage above will call for 59.60. MACD is above zero line and histograms are in decreasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in oversold region and giving negative crossover for confirmation of bearish stance; while the RSI is in oversold region and more downside can be expected.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 54.90-57.00 with stop loss at 57.00; targeting 54.50-54.05-53.60 and 53.00-52.50-51.9. Buy above 54.50-52.00 with risk daily closing below 52.00 and targeting 54.90-55.50-56.10 and 56.50-57.00.

 
Intraday Support Levels
S1     54.50-54.05
S2     53.60
S3     53.00-52.50

Intraday Resistance Levels
R1     54.90-55.50
R2     56.05
R3     56.50-57.00

TECHNICAL INDICATORS
Name   Value Action
14DRSI   45.107 Sell
20-DMA   55.45 Buy
50-DMA   56.01 Buy
100-DMA   58.86 Sell
200-DMA   56.39 Buy
STOCH(5,3)   82.130 Buy
MACD(12,26,9)   -0.905 Sell

EUR/USD

AAFX TRADING

EUR/USD on Monday made an intraday low of US$1.1161/EUR, high of US$1.1229/EUR and settled the day up by 0.147% to close at US$1.1212/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1293), which become immediate resistance level, break above will target 1.1320-1.1350. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving negative crossovers to signal for bearish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider.

Trading Strategy: Neutral to Buy

Buy above 1.1180-1.1000 with risk below 1.1000, targeting 1.1200-1.1250-1.1290 and1.1.1325-1.1350-1.1400-. Sell below 1.1200-1.1350 targeting 1.1180-1.1130 and 1.1090-1.1005 with stop-loss at daily closing above 1.1210.

 
Intraday Support Levels
S1     1.1180
S2     1.1130
S3     1.1090-1.1000

Intraday  Resistance Levels
R1     1.1200-1.1250
R2     1.1290
R3     1.1325-1.1350

TECHNICAL INDICATORS
Name   Value Action
14DRSI   52.562 Buy
20-DMA   1.1172 Buy
50-DMA   1.1238 Sell
100-DMA   1.1223 Sell
200-DMA   1.1293 Sell
STOCH(5,3)   61.958 Sell
MACD(12,26,9)   -0.0013 Buy

GBP/USD

AAFX TRADING

GBP/USD on Monday made an intra‐day low of US$1.2014/GBP, high of US$1.2105/GBP and settled the day up by 0.274% to close at US$1.2072/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 200DMA (1.2960) is become major support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in oversold territory and giving positive crossover to confirm bearish stance. MACD is above zero line but histograms are increasing lead to downward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.2065-1.2250 with targets at 1.2010-1.1980 and 1.1950-1.1900 stop-loss should be below 1.2250. Buy above 1.2010-1.1900 with targets 1.2065-1.2100-1.2140 and 1.2190-1.2250 with stop loss closing below 1.2250.

 
Intraday Support Levels
S1     1.2010-1.1980
S2     1.1950
S3     1.1900

Intraday Resistance Levels
R1     1.2065-1.2100
R2     1.2150
R3     1.2190-1.2250

TECHNICAL INDICATORS
Name   Value Action
14DRSI  

27.170

Buy
20-DMA   1.2277 Sell
50-DMA   1.2486 Sell
100-DMA   1.2712 Sell
200-DMA   1.2816 Sell
STOCH(5,3)   15.175 Sell
MACD(12,26,9)   -0.0011 Sell

USD/JPY

AAFX TRADING

USD/JPY on Monday made intra‐day low of JPY105.04/USD and made an intraday high of JPY105.68/USD and settled the day down by 0.243% at JPY105.28/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (107.84), which is initial support on the daily chart. 14-D RSI is currently in overbought region and chances of downward are expected based on RSI. MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is in oversold territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 106.10-108.00 with risk above 108.00 targeting 105.80-105.00 and 104.50-104.00. Long positions above 105.80-104.00 with targets of 106.50-107.00 and 107.60-108.00-109.05 with stop below 106.00.

 
Intraday Support Levels
S1     105.00
S2     104.60-104.00
S3     103.50

INTRADAY RESISTANCE LEVELS
R1     105.80-106.10
R2     106.50
R3     107.00-107.60

TECHNICAL INDICATORS
Name   Value Action
14DRSI   29.261 Buy
20-DMA   107.42 Sell
50-DMA   107.84 Sell
100-DMA   109.28 Buy
200-DMA   110.25 Sell
STOCH(9,6)   19.253 Sell
MACD(12,26,9)   -0.553 Buy

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